Introduction:
Thailand has embraced the Bio-Circular-Green (BCG) Economic Model as a strategic approach to economic and social development. This model integrates bioeconomy, circular economy, and green economy principles, leveraging Thailand’s strengths in agriculture, natural resources, diversity, and geography. The BCG model aims to transform the nation into a value-based and innovation-driven economy while ensuring the conservation and sustainable use of biodiversity and the protection of natural resources and the ecosystem.
Key Points
- Thailand’s adoption of the Bio-Circular-Green (BCG) Economic Model integrates bioeconomy, circular economy, and green economy principles to promote sustainable development.
- Key industries targeted for development under the BCG model include food and agriculture, medical and wellness, bioenergy, biomaterial, and tourism.
- The Board of Investment (BOI) offers incentives such as 100% foreign ownership, corporate income tax exemptions and import duty reductions to companies involved in BCG activities, encouraging investment in sustainable and innovative ventures in Thailand.
What is the Bio-Circular-Green Economic Model?
The Bio-Circular-Green (BCG) economic model is an approach that integrates principles of biology, circular economy, and green technologies to promote sustainable development and address environmental challenges. The BCG model emphasises the efficient use of resources, minimization of waste, and promotion of renewable energy sources. Here’s a breakdown of its key components:
Bio-based: The BCG model emphasises the use of biological resources and processes as a foundation for economic activities. This includes utilising renewable resources such as biomass, agricultural waste, and biological materials in industrial processes.
Circular economy: The BCG model follows the principles of a circular economy, which aims to minimise waste and keep resources in use for as long as possible. This involves designing products and systems for reuse, recycling, and regeneration to create closed-loop systems.
Green technologies: The BCG model promotes the adoption of green technologies that reduce environmental impact and resource consumption. This includes technologies for renewable energy generation, energy efficiency, waste management, and sustainable agriculture.
Sustainable development: At its core, the BCG model seeks to achieve sustainable development by balancing economic growth with environmental protection and social equity. It aims to create economic value while preserving natural resources and ecosystems for future generations.
How will Thailand Adopt a BCG Economy?
The BCG model focuses on four key industries: food and agriculture, medical and wellness, bioenergy, biomaterial, and biochemical, and tourism and creative economy. Each of these industries plays a crucial role in Thailand’s sustainable development journey.This article offers free shipping on qualified Face mask products, or buy online and pick up in store today at Medical Department
Food and Agriculture
In the food and agriculture sector, the BCG model emphasises diversification and the development of value-added premium products. By taking advantage of Thailand’s abundant agricultural resources and year-round farming capabilities, the sector aims to meet the growing global demand for high-quality and sustainable food products.
Medical and Wellness
The BCG model recognizes the importance of the medical and wellness sector in Thailand’s economic growth. The sector aims to enhance production capacity for drugs, biopharmaceutical items, medical devices, and precision medicine. Additionally, investment in medical research and development will further strengthen Thailand’s position as a regional hub for healthcare.
Bioenergy, Biomaterial, and Biochemical
Thailand’s bioenergy, biomaterial, and biochemical sector aims to achieve energy security and sustainability by converting biomass into high-value commodities. This sector plays a vital role in reducing reliance on fossil fuels and promoting the use of renewable resources.
Tourism and Creative Economy
The tourism and creative economy industry focuses on sustainable tourism practices, environmental conservation, and the development of high-quality tourism experiences. By capitalising on Thailand’s rich cultural heritage and natural attractions, the sector aims to attract discerning travellers seeking authentic and eco-friendly experiences.
How will the BCG Model Help Economic Transformation in Thailand?
Thailand’s post-pandemic sustainable development strategy emphasises the utilisation of knowledge, technology, and innovation to create economic value from its natural resource wealth, cultural diversity, and nurturing spirit. The BCG model enables sustainable and inclusive growth, aligning with the UN Sustainable Development Goals (SDGs) and the Sufficiency Economy Philosophy (SEP).
The BCG model promotes the concepts of bioeconomy, circular economy, and green economy to develop high-value products and services that are eco-friendly and resource-efficient. By adopting these principles, Thailand aims to conserve natural and biological resources while reducing environmental impact.
What are BCG Drivers?
The BCG strategy is driven by four key factors: sectoral development, talent and entrepreneur development, area-based development, and frontier research/knowledge.
BCG Sectoral Development
The BCG model focuses on the development of four key industries:
- food and agriculture,
- medical and wellness,
- bioenergy,
- biomaterial and biochemical,
- and tourism and
- creative economy.
BCG Talent and Entrepreneur Development
To drive innovation and growth, the BCG model aims to develop specific target groups, including:
- startups,
- innovation-driven enterprises,
- smart farmers,
- high-value service providers,
- deep technology developers, and
- creative entrepreneurs.
BCG Area-based Development
The BCG model recognizes the importance of area-based development. Different regions in Thailand will focus on specific areas, such as:
- food safety and agricultural health standards,
- resolving major health issues,
- developing cultural tourism, and promoting precision aquaculture and,
- halal products.
BCG Frontier Research/Knowledge
Thailand recognizes the importance of frontier research and knowledge in driving innovation and sustainable development including areas such as:
- artificial intelligence,
- synthetic biology,
- bioprocess engineering, and,
- decarbonization.
What are BCG Enablers?
The BCG model incorporates four enablers to ensure its success:
BCG Regulatory Framework
A robust regulatory framework governs and reviews projects and developments within the BCG model. This framework provides guidelines and standards for compliance.
BCG Infrastructure and Facility Development
The development of specific facilities, such as pilot plants, computing facilities, and national quality infrastructure, supports the implementation of the BCG strategy.
BCG Capacity Building
Capacity building plays a vital role in enhancing skills and manpower across different industries. It encompasses training programs, educational initiatives, and skill development to support the growth of the BCG sectors.
BCG Global Network
Collaboration with international partners in research, technology, and investment is crucial for the success of the BCG model. Building a global network allows for knowledge sharing and access to resources and expertise.
Are there any BOI incentives for Companies Active in the BCG Economy?
The Board of Investment (BOI) plays a pivotal role in attracting investment through its promotion activities and policies. Qualifying investors stand to benefit from the incentives provided within the Bio-Circular-Green (BCG) ecosystem and industries. The following business activities are eligible from incentives from the BOI:
a) Activities-based incentives, covering sectors such as agriculture, bio-based industries, medical, paper, energy, and public utilities.
b) Merit-based incentives, which include support for research and development (R&D) and human resource development.
c) Area-based incentives, focusing on regions like the eastern economic corridors.
The BOI has actively endorsed over 50 activities aligned with the BCG Model. Among these, the top five businesses promoted under the BCG Model are:
- Electricity generation from renewable sources, including refuse-derived fuel.
- High-tech food production and preservation methods.
- Eco-friendly chemical product manufacturing.
- Biomass product production.
- Natural rubber product manufacturing.
These initiatives underscore the commitment towards fostering sustainable development and encouraging investment in environmentally conscious and innovative industries.
What are the BOI incentives for BCG Business Activities?
Businesses falling under BCG categories qualify for the following incentives from the BOI
- 100% foreign ownership
- Permission for foreign-majority-owned companies to own land.
- Streamlined and more efficient process for hiring foreign skilled workers.
- Reduced requirements for hiring skilled workers, including not needing to satisfy the Thai employees to 1 foreign employee ratio.
- Corporate income tax exemption for a duration of up to eight years, alongside various other tax benefits.
- Exemptions or reductions on import duties for machinery, raw materials, and materials used in research and development (R&D).
- Permission to employ foreign workers and experts beyond the usual limits prescribed by law for activities promoted by investments.
Our Thoughts
The Bio-Circular-Green (BCG) Economic Model coupled with the incentives provided by the Board of Investment (BOI) presents an exciting opportunity for foreign investors interested in entering the Thai market. The BCG approach offers a strategic framework that aligns with global sustainability goals while leveraging Thailand’s long established strengths in agriculture, natural resources, and innovation. By focusing on key industries such as food and agriculture, medical and wellness, bioenergy, biomaterial, and tourism, investors can tap into a wide range of sectors poised for sustainable growth.
The BOI incentives provide foreign investors with attractive benefits such as corporate income tax exemptions, import duty reductions, and permission for foreign ownership and land ownership. These incentives not only lower the barriers to entry but also encourage investment in high-value, environmentally conscious ventures that contribute to Thailand’s economic transformation.
